A corporate or personal taxpayer who owns a qualified energy generator is eligible for a tax credit in an amount equal to 1 cent per kilowatt hour of electricity produced by the qualified energy generator using a qualified energy resource in the tax year. A variable rate of credit is added for electricity produced using solar energy.
The rate starts at 1.5 cents in the 1st year of operation and increases in increments of .5 cent each of the next 5 years, to a maximum of 4 cents, and then will decline by .5 cent per year in the next 4 years to 2 cents in the 10th year of operation. The 1 cent per kilowatt hour rate applies for all other qualified energy generation facilities. The facility must generate a minimum of 1 megawatt. The total amount of electricity that can qualify for the corporate and individual income tax credits is 2 million megawatts for wind and biomass with an additional 500,000 megawatt hours allowed for solar-generated power.